We don't need 3G, say Chinese consumers

Nicole McCormick
13 Apr 2010

Mobile users in China see 3G as “unnecessary” and “expensive”, despite heavy promotions by the country’s three mobile operators, according to a new survey.

The survey by China Reality Research, an affiliate of financial services firm CLSA, found that 71% of 2G mobile users have no plans to upgrade to 3G.

Only about 10% of respondents subscribed to 3G.

“Most users don’t think that there is a need to subscribe to a 3G service,” said CLSA on the survey of 300+ mobile customers, conducted in March.

“Many [respondents] also think 3G pricing is expensive.”

China’s three mobile operators have been conservative in growing 3G subscribers, especially China Mobile and China Unicom, said CLSA.

Only 10 million customers had signed up for 3G by the end of 2009, and operators were targeting just 30 million new subs this year, CLSA said.

“China Mobile is still limited by a lack of affordable handsets and….it doesn’t plan to spend on heavy handset subsidies to migrate their high-end users to TD-SCDMA,” said CLSA.

The company is planning to launch RMB1,000 ($146.50) low-end TD-SCDMA handsets to help meet its target of 10 million new subs in 2010.

The survey also found that while Unicom’s 3G service is gaining recognition, most people think it is too expensive.

“Unicom’s 3G strategy is not working,” says CLSA.

“The minimum monthly [3G plan] is high at RMB98 [and] handset subsidies are only given to customers who are committed to a high upfront payment and expensive monthly plans.”

While Unicom plans to increase handset subsidies and lower upfront costs to achieve its goal of 10 million new 3G subs in 2010, it “doesn’t have a final plan yet,” said CLSA.

“This is not an easy target as Unicom is targeting high-end users which already have mobile services. It will have to take away these high users from their competitors which will be costly.”

While there are 1.5 million iPhone users in China, Unicom reportedly had only sold 400,000 iPhones as of January.

Rather than subscribing to Unicom’s 3G expensive plans, many iPhone owners have subscribed to cheaper 2G plans from China Mobile and are using EDGE for data services.

CLSA believes that China Telecom is the most aggressive on 3G, but it only had 4 million 1xEV-DO users at the end of 2009.

Telecom’s 3G growth “may start picking up this year as it expects more low-end EV-DO handset will be launched by mid-year.”

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